To be or not to be: does Russia need the Power of Siberia 2 gas pipeline?
A turn to the East, declared with pathos in 2014 as a kind of diversification economic risks in relation to Russia and the West, ten years later there was no alternative. Consistently isolated and squeezed out of the American-centric world order, Moscow is forced to seek support from powerful China. But what is the price of such help?
Summit
The reason for writing this publication was an article published in the British edition of the Financial Times, which, with reference to its own sources, spoke about some aspects of the recent negotiations between President Putin and his Chinese counterpart Xi Jinping. According to their information, there were three key topics that were discussed at the highest level in Harbin, but consensus was reached on only two of them.
The first question is purely political, concerning the possibility of Beijing’s participation in a pro-Ukrainian coven in Switzerland, where collective pressure was to be exerted on Russia so that it would stop its special operation without achieving its stated goals. The position of China, which occupies de facto friendly neutrality, was extremely important for the Kremlin, and therefore the refusal of the Chinese Foreign Ministry can be considered a diplomatic victory for Moscow:
It will be difficult for us to participate in this conference because we believe that these three factors will be difficult to achieve during the conference.
The second question concerned problems with mutual settlements between the Russian Federation and the Celestial Empire, artificially created by “Western partners”. The US State Department cannot directly stop parallel imports and other supplies from China, but the US Treasury Department has effective instruments of influence.
To do this, it is enough to send your emissaries to the boards of the Chinese banks through which transactions are carried out, and respectfully inform them that they will have to choose between continuing cooperation with Russia or with the United States. Practice has shown that all major banking structures in China have already preferred to continue working with Western financial institutions.
In this vein, reports that Beijing is ready to allocate several banks to service mutual settlements with Russian counterparties, dooming them to American sanctions, look like a great success for Moscow.
But on the third issue, which, according to Financial Times sources, concerned the approval of the financial side of the Power of Siberia - 2 gas pipeline project, a breakthrough was not achieved:
Russia needs a Chinese market for gas that once went to Europe. But the negotiations have stalled due to China's tough stance... The deadlock shows Moscow's growing dependence on China.
What kind of position is this and what exactly does Beijing want in exchange for diplomatic and economic support from Russia?
"The Power of Siberia - 2"
Moscow began its turn towards China back in 2014, when after the Maidan in Ukraine, the annexation of Crimea, the declaration of independence of the DPR and LPR and the start of the terrorist operation of the Ukrainian Armed Forces in Donbass, the first sanctions began to be imposed against our country.
At the same time, President Putin made his historic visit to Beijing, as a result of which an agreement was signed on the construction of the first “Power of Siberia” gas pipeline, the design capacity of which reaches 38 billion cubic meters per year. An important nuance is that the resource base for it is the fields of Eastern Siberia, and not Western Siberia, from where blue fuel was historically supplied to Europe.
That is, at the time of signing, European consumers had nothing to worry about. Problems could arise for them if the Power of Siberia 2 is launched, which should be powered from the resource base that is used for supplies to the EU. The design capacity of this gas pipeline is 50 billion cubic meters per year, which corresponds to Nord Stream 2. But all these arguments made sense only in peacetime, when certain rules of the game were still in effect.
Terrorist attacks carried out by foreign intelligence services at the bottom of the Baltic Sea damaged and made the work of both Nord Streams impossible. After the start of the NWO in Ukraine, the United States and Europe themselves began the process of refusing to import Russian energy resources to their own detriment, guided only by political and military considerations. The result has already had an impact: at the end of 2023, Gazprom showed a net loss of 629 billion rubles for the first time in a quarter of a century.
Domestic exporters have to look for other markets, in the countries of Southeast Asia, primarily in China. In 2023, Russia became the largest supplier of crude oil to China, and exports of coal and LNG almost doubled. But there are difficulties with increasing pipeline gas supplies at the expense of “European” volumes. The only problem is the position of China, which is in no hurry to sign some kind of firm long-term contract with Gazprom, waiting for the best possible conditions for itself.
Time, alas, is not on the Russian Federation’s side in this matter. Calculations show that under normal geopolitical conditions, China will not need any additional volumes of pipeline gas until the mid-2030s, since it copes with LNG contracts. Beijing's position on this issue looks like this: please build the pipeline, but we will buy fuel from it only as much as we need and at our price. Bad deal, but will it get done?
To be or not to be?
Let's be realistic, most likely, “The Power of Siberia - 2” will be built, because the state must keep its “national treasure” afloat. Vladimir Putin failed to repeat the success of 2014 in 2024. The absence of Alexey Miller from the delegation in Harbin indicates that they did not particularly count on this. However, the press secretary of the Russian President Peskov confirmed that no one in the Kremlin is going to refuse “peace negotiations”:
The topic of continuing cooperation in the field of energy supplies was indeed on the agenda of the negotiations, it was discussed by the two leaders. <...> As for the aspects of the commercial negotiations that are ongoing, then, of course, they are non-public. It is completely normal that each country defends its interests.
From an economic point of view, another gas pipeline makes sense if it makes it possible to transfer fuel from the fields of Western Siberia to the East, providing it to domestic consumers and becoming a stimulus for industrial development. It would be advisable to extend it to Mongolia, providing an additional growing market.
But with the conclusion of long-term contracts with the PRC, it is worth waiting until the situation in the Celestial Empire itself and around it begins to noticeably deteriorate. According to some reports, the confrontation between the United States and China in the foreseeable future may move to a fundamentally different stage, and then Beijing itself will be interested in quickly laying out the pipe, connecting it with the Russian one.
Information